EMERGING MARKETS-Chilean markets rally as Pinera wins presidency

4 Min Read

By Bruno Federowski
SAO PAULO, Dec 18 (Reuters) - Chilean stocks hit a record
high on Monday and the peso soared after conservative Sebastian
Pinera won a presidential election by a wider-than-forecast
margin, fueling expectations of further business-friendly
policies.
An investor favorite in the $250 billion economy, Pinera's
proposals are seen as pro-mining in the world's top copper
producer. He has pledged support and stable funding for
state-run miner Codelco, and has promised to slash red tape that
had bogged down projects under outgoing President Michelle
Bachelet.
Chile's benchmark IPSA stock index jumped 7.3
percent in Monday trading.
Shares of construction companies such as Besalco SA
, Socovesa SA, Paz Corp and SalfaCorp
SA rose more than 10 percent. Some banks and miners
also advanced by double digits.
"Pinera's campaign agenda focused on investment and growth,
and we believe the administration will articulate policies with
that aim, which should help to consolidate the upbeat business
and consumer expectations," JPMorgan economists wrote in a
report.
"That said, Pinera's administration will need ... political
savvy to negotiate laws in a fragmented Congress."
The Chilean peso strengthened 1.8 percent against
the dollar, its biggest one-day advance in a year and a half,
leading gains the region.
Other currencies were range-bound amid doubts whether a
proposed U.S. tax cut would have a major impact on economic
growth, after the bill moved over the weekend another step
closer to passing.
Uncertainty over whether the tax bill would indeed be pushed
through, as well as questions over its pro-growth effects, have
cast doubt on the outlook for inflationary pressures in the
United States, which has boosted expectations of higher interest
rates.
Higher U.S. rates could dampen demand for high-yielding
assets, such as currencies from emerging markets.
Key Latin American stock indexes and currencies at 1720 GMT:
Stock indexes daily % YTD %
change change
Latest
MSCI Emerging Markets 1126.41 0.71 29.72
MSCI LatAm 2765.71 1.87 16
Brazil Bovespa 73121.50 0.71 21.41
Chile IPSA 5617.48 7.31 35.32
Chile IGPA 28098.86 7.11 35.52
Argentina MerVal 27050.38 0.11 59.89
Currencies daily % YTD %
change change
Latest
Brazil real 3.2912 0.49 -1.28
Mexico peso 19.0810 0.13 8.72
Chile peso 624.5 1.84 7.40
Colombia peso 2986.44 0.25 0.50
Peru sol 3.293 -0.12 3.67
Argentina peso (interbank) 17.5600 -0.26 -9.60
Argentina peso (parallel) 18.04 -0.44 -6.76
(Reporting by Bruno Federowski; Editing by Frances Kerry)